BRIDGETOWN, Barbados — The board of directors of the Caribbean Development Bank (CDB) has approved a policy-based loan of US$75 million to the government of Barbados. The loan is part of wider coordinated assistance provided by international financial institutions to the government, to support the implementation of the Barbados Economic Recovery and Transformation (BERT) Plan.
Mia Mottley, prime minister of Barbados and CDB’s Governor for Barbados, and Dr William Warren Smith, president, CDB signed the loan agreement on Friday during a ceremony at the bank’s headquarters.
The funding will support the government of Barbados’ programme, which includes revenue administration and collection, expenditure and debt management, public financial management, and broad-based growth and social development.
“This policy-based loan represents CDB’s commitment to helping Barbados restore economic stability and achieve sustained growth. Underpinned by considerable analytical and technical work and stakeholder consultation, it lays the foundation for scaled-up support from CDB to Barbados over the medium to long term,” Smith said.
“We commend the government of Barbados for the notable progress it has made to urgently adjust the country’s macroeconomic situation, and acknowledge the strong commitment to restoring fiscal stability, which it has demonstrated,” he added.
The policy-based loan was designed to align with national priorities, and developed in close consultation with the country’s social partnership, its ministries, departments and agencies. In addition, it reflects ongoing collaboration between the International Monetary Fund, the Inter-American Development Bank, the World Bank and CDB, with respect to Barbados’ macroeconomic situation.
The loan is the first of a series of four programmatic interventions proposed over the next four years. This intervention will assist the government with the implementation of the BERT Plan, focusing on immediate fiscal consolidation and stabilisation policies, social sector reforms, and competitiveness and growth-enhancing reforms for economic and social development, resilience-building and sustainability.
In August, CDB’s board of directors approved a grant of US$400,000 to help the government of Barbados further develop its economic reform programme, setting in motion the bank’s plan to support the country’s return to sustained economic growth.
In accordance with CDB’s policy-based operations policy framework, the policy-based loans provide support to governments in response to urgent needs occasioned by external and/or internal economic imbalances, including debt management crises and temporary foreign reserves shortages.